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Just had the final estimation of costs from my solicitor just had afew shocks on the statement would welcome your comments. I am buying an apartment in San Pedro for 360000e was offered with developers mortgage which we declined now have these items on the statement:
Cancellation previous mortgage 1706e
Penalty cancellation previous mortgage 2170e
Bank opening commission 2360eThere are 6236e of fees I was not expecting, I never took the developers mortgage and wrote on the contract that I would not accept it.
What is a bank opening commission? I already have a Halifax bank account inSpain.
Would welcome your comments.
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Have a read of this previous thread
http://www.spanishpropertyinsight.com/forums/viewtopic.php?t=206&highlight=morgage
and also have a thorough read of your purchase contract – any charges in respect of taking over or not taking over the existing mortgage should have been set out therein. -
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Oh dear!
All 3 items sound highly dubious to me. These charges need to be thoroughly looked into before you pay anything to this firm.
What on earth is a ‘bank opening commission’? Who is charging this, the bank or the solicitors? I’ve never heard of a bank charging 2,360 Euros to open an account. Opening an account should be free. If you use a lawyer to help you do this simple task I can understand them charging for the service, but not more than a couple of hundred Euros max, assuming they spend a couple of hours with you to do it.
You shouldn’t have to pay anything to refuse the developer’s mortgage. What isn’t clear is who is trying to charge you for the cancellation and the penalty. Who gets to keep the money on these charges, developer or lawyers? Try and find out.
Mark
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I would challenge this. Marbella lawyers charge more than anyone else because of their flashy offices.
I am not saying that ALL lawyers in Marbella are like this as I know a few good ones, but I also know the names of some total sharks and I just do not know how they continue to trade with how they operate.
My advice would be is to request a “breakdown” of the invoice on a “points system” something that all lawyers have to abide by set by Madrid. Then find yourself a lawyer in Malaga who has a scruffy office full of books and mess – do not be put off – it means he is a REAL lawyer. He will charge you minimal costs and put the Marbella lawyer straight. If you have a Malaga lawyer, your Marbella lawyer will pay attention, believe me. He is just trying it on as he probably wants to buy a 4 X 4 for his wife for Christmas. Its happened to me…….loads of times.
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Hi Gingerbread
Normally when the developer takes on Finance he has a cancellation cost if the mortgage is not taken out by the buyer. Usually when the buyer declines the charge passes to the developer – but this should be stipulated in the contract you signed. This is the cancellation costs and sounds like your developer is trying it on (as well as your lawyer)
The bank opening costs sounds like a commission the bank charges for taking on the initial mortgage – usually this is around 1% of the mortgage, although if you contest thsi charge it is possible to have it reduced or negated. Or it may be that if your lawyer has opened an account for you he is again trying it on – as Mark said it costs nothing to open an account in Spain and even if your lawyer did open it for you this amounts to 20 minutes work (probably done by a junior)
Good luck with your claim and lets hope the charge is dropped completely.
Vince
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My agent has spoken to my lawyer about this problem.
The lawyer has agreed to inform the developer during the notary meeting that I am not prepared to pay for the mortgage set up and cancellation costs, I am due to close on Monday.
However my lawyer has asked me to still send money which will be deposited in his bank account to cover the mortgage set up and cancellation costs – this sounds well dodgy, what do you guys think.
What incentive does my lawyer have to close the deal satisfactorily if the money to make it easy for him is sitting in his bank account – very worrying.
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Katy – that’s rubbish.
I guarentee you that all of the above is somewhere in the PPC, it always is. Developers will not carry the can for anything, it will be stacked all in their favour. I’ve seen it so so many times.
Get the contract translated by another lawyer if you don’t trust your own. If he’s asking for the cash then sure as eggs are eggs, he will pay it to the developer. Your only bargaining point will be not to pay up.
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@gingerbear2 wrote:
The lawyer has agreed to inform the developer during the notary meeting that I am not prepared to pay for the mortgage set up and cancellation costs, I am due to close on Monday.
Your lawyers should do what you ask them to do, rather than condescend to inform the developer of this or that. They should be fighting your corner tooth and nail. They should have made it clear to the developer from the very start that you would not under any circumstances pay the developer’s mortgage cancellation costs. They should have informed the developer at once, rather than store it up for trouble in the notary’s office. It doesn’t sound like your lawyers are looking after you with much enthusiasm.
Let me preface this by saying I’m not a lawyer and so this should NOT be taken as legal advice. However both of the Spanish lawyers I have spoken to on this question agree that asking buyers to pay the developer’s mortgage cancellation costs amounts to abusive clauses (clausulas abusivas) that would not stand up in court. However, it is true that you have to review the contract you signed. If you have signed a document explicitly stating that you are prepared to pay mortgage cancellation costs if they arise then it doesn’t help your case.
Guest is right about the money. Don’t loose control of it. My advice is think twice before you transfer it to your firm of solicitors (GV&A). I’ve heard about this firm before. Proceed with caution. If you did want to have the funds available to pay the costs in a worst-case scenario, then I would take it along in cash. But don’t let lawyers or developer know that you have the funds on you to pay the cancellation costs.
The market is tough and developers are desperate to close sales. Under these circumstance buyers have the power, so why put up with crap like this from a developer? Trying to make you pay costs that they should pay themselves. Honestly!
Mark
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Gingerbear2,
I’ve done more research on this question.
You can’t be forced to pay the Developer’s mortgage cancellation costs, even if it says so in the private contract. The reason being that this would amount to an illegal clause that would be thrown out in court.
So turn up to the notary with all the money you need to buy the property, but not to pay the cancellation costs. If the developer refuses to complete you have the notary as a witness that the developer is in breach of contract (refusing to complete despite the buyer providing all the funds legally required to provide).
By the way, I know you are out there completing today – good luck – but I’d appreciate it if you could get back to me regarding the ‘crime on the costas’ topic ASAP.
Thanks
Mark
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